India’s “Are You Poor?” Survey

Every few years, India surveys rural areas to determine which households deserve to be classified as poor and receive corresponding welfare benefits. The next such census, which will likely start next year, will be a crucial part of the government's reassessment of its poverty levels, which the Wall Street Journal reported about on Tuesday.

So how does India distinguish between above and below-the-poverty-line households?

In the 2002 rural census — the last one that was completed — the government used a complex scoring scheme to eliminate people not viewed as needy. Households were judged based on 13 indicators and were given a total score from 0 to 52, with the lower scorers considered the poorest.

For example, a family gets zero points if they go to the bathroom in the open, one point for using a group latrine with an irregular water supply, two points for using a group latrine with a regular water supply, three points for using a clean group toilet with a regular water supply, and four points for a private latrine.

Similarly, families would be less likely to be deemed in poverty if they had a concrete foundation for their home rather than mud walls, if they had 10 garments of clothing rather than two, and if they owned a telephone, electric fan, or pressure cooker.

Many economists have challenged these "exclusion" criteria as unfair and arbitrary and are pushing to revise them before next year’s census.

"It has been a real fiasco. It's such a complex separation to make" between households above and below the poverty line, said Jean Dreze, a development economist who has been influential in Indian economic policymaking. "The process is very divisive and open to manipulation."

One idea backed by some economists and government officials is to include whole categories of people — such as poor widows, landless agricultural laborers, the homeless and marginalized tribes — while applying more limited exclusion criteria to others.

The trick, of course, is to make sure that including swaths of the population by default doesn't put the government on the hook for gigantic increases in welfare spending that it can't afford.

Manjula Krishnan, chief economic adviser in the Ministry of Rural Development, said the government is trying to avoid past mistakes that left obviously poor people off the list of below-poverty-line households, thereby excluding them from welfare aid.

"We're still crystallizing our ideas on how to identify poor households," she said in a recent interview. "It's a difficult task. We hope such anomalies won't occur and we'll really reach the poor people."